Suppose that the current federal funds rate is below the federal funds target rate. In order to raise the federal funds rate the Fed will ________________ securities on the open market which will ________________ the supply of reserves in the market for reserves, pushing the rate closer to the target rate

The long-run average total cost curve is less u-shaped than the short-run average total cost curve

a. True b. False Indicate whether the statement is true or false

Refer to the diagrams for two separate product markets. Assume that society's optimal level of output in each market is Q 0 and that government purposely shifts the market supply curve from S to S 1 in diagram (a) on the left and from S to S 2 in

diagram (b) on the right. The shift of the supply curve from S to S 1 in diagram (a) might be caused by a per-unit:



A. subsidy paid to the producers of this product.
B. tax on the producers of this product.
C. subsidy paid to the buyers of this product.
D. tax on the buyers of this product.